India: Adopted Finance Bill 2022 including expansion of income tax to virtual digital assets

On 29 March 2022, the Finance Bill 2022, which includes an expansion of income tax to include virtual digital assets, was adopted by the Rajya Sabha, the Upper House of the Parliament of India. Under the Bill, virtual digital assets are defined to include cryptocurrencies and non-fungible tokens. The Bill makes the income from trading virtual digital assets subject to an income tax of 30%. Further, the Bill specifies that trading losses cannot be set off against income from other sources. The provisions regarding the taxation rate will come into force on 1 April 2022. Finally, the Bill introduces a one-per cent tax-deducted-at-source on all transactions involving virtual digital assets which will come into force on 1 July 2022.